TMI Blog2023 (9) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... th Rule 4. We find that Rule 11 can be applied only when the situation is not covered by any of the previous valuation rules. It is undisputed that the appellant and JSPL and JPL are related persons. Therefore, it must be examined if they can be covered by Rule 10 (a) or Rule 10(b) - If the appellant and JSPL an JPL were related persons only because they were interconnected undertakings and they were not also related in any of the other three ways [clauses (i) (ii) or (iv) of clause (b) of sub-section (iii) of Section 4] or the appellant and JSPL or JPL are the holding or subsidiary companies of each other, then valuation should be done as if they are not related persons. In this case, there is no allegation or evidence that JSPL and JPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Valuation Rules, 1944 [Rules ] read with rule 4 and rule 9 and Rs. 65,524/- was confirmed for the period December 2013 to April, 2015 under proviso to rule 9 read with rule 8 of the Valuation Rules. The reason for this differential treatment is that the Valuation Rules were amended from December, 2013. 2. The appellant is a manufacturer of TMT bars of various grades and it sold them to independent buyers as well as to two its inter-connected undertakings, namely, M/s Jindal Steel Power Ltd. [JSPL] And M/s Jindal Power Limited [JPL ]. It is undisputed that the appellant and these two entities are inter-connected undertakings and, therefore, they are related persons as per Section 4 of the Central Excise Act, 1944 [ACT ]. M/s JSPL furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the subsequent period i.e., December, 2013 onwards, according to the Revenue, the value should be determined as per rule 9 at 110% of the cost of production. 6. On behalf of the appellant learned counsel made the following submissions. (i) The appellant and JSPL and JPL are inter-connected undertakings and are, therefore, related persons of the appellant in terms of clause (i) of section 4 (3)(b) of the Act. (ii) Therefore, rule 10 is applicable to the present facts and not rule 11 which can be applied only if none of the other rules applies. (iii) Rule 10 has two parts 10(a) and 10(b). As per Rule 10 (a), the goods sold to inter- connected undertakings which are also related to the appellant as per clause (ii)(iii)(iv) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time and place of removal; (c) the assessee and the buyer of the goods are not related; and (d) the price is the sole consideration of sale. 10. If any one or more of the above conditions is/ are not met, the value shall be determined as per the Central Excise Valuation Rules, 2000. Of the four conditions for accepting the transaction value as the assessable value to determine excise duty, the one relevant to this case is that the buyer and seller are not related . It is undisputed that the appellant and two of its buyers, viz., JSPL and JPL were related persons. It is also undisputed that the appellant had also sold to independent buyers. 11. According to the appellant, it had sold goods to JSPL and JPL who either fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Rules 1 and 2 are the preliminary provisions. (b) Rule 3 mandates that valuation should be done as per the rules. (c) Rule 4 deals with situations where goods are sold but not at the time of removal. (d) Rule 5 deals with situations where goods are sold, but not at the place of removal. (e) Rule 6 deals with situations where there is an additional consideration for sale. (f) Rule 7 deals with situations where there is no sale and the goods are transferred to the assessees owned depot not at the premises of the consignment agent. (g) Rule 8 deals with situations where goods are captively consumed by the assessee or on its behalf in which case, the valuation has to be done at 110% of the cost of production. (h) Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (b) of sub-section (iii) of Section 4] or the appellant and JSPL or JPL are the holding or subsidiary companies of each other, then valuation should be done as if they are not related persons. 17. In this case, there is no allegation or evidence that JSPL and JPL are connected to the appellant in any of the other three ways. There is no allegation that the appellant is either the holding or the subsidiary company of either JSPL or JPL. The only allegation is that they are associated companies and hence they are interconnected undertakings. It has also been alleged that JPL is the subsidiary of the JSPL, i.e., one of the buyers is the subsidiary of another buyer. Therefore, this case falls squarely under section 10 (a) of the Valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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